Stepped-Up Marketing Spend Fuels Gains At Adidas, Reebok

Amid what’s turning out to be a banner year for athletic brands, Adidas is building momentum, and says sales are up 12% this quarter. That’s based on gains of 16% in its Adidas brand, and a 6% increase at Reebok. 

In part, those gains have been powered by more advertising muscle, and it says it boosted point-of-sale and marketing investments by 31% compared to the prior year “to spur revenue growth in 2016 and drive long-term brand desire.” But it’s also due to what NPD Group is calling one of the strongest years in the last decade for athletic shoes and apparel.

Adidas says its brand’s performance was particularly strong in Western Europe and North America, where sales (on a currency neutral basis) climbed 31% and 12%, respectively. TaylorMade-adidas Golf was a notable weak spot, with revenues dropping 15%.



The German-based company says it expects its strong top- and bottom-line trends to carry over into the year ahead, and is now forecasting a sales increase of between 10% and 12%, which it says will be “supported by rising consumer spending, providing a positive backdrop for the continued growth and expansion of the sporting goods industry,” as well as new products. It expects marketing investments to remain level with this year’s spending.

In terms of consumer loyalty, Adidas is ranked No. 3, according to the latest ranking from Brand Keys’ latest Customer Loyalty Engagement Index, after Nike and New Balance, which tie for the top spot. (Skechers is next, followed by Adidas’ Reebok, Under Armour and Puma.)

“Adidas does very well on offering a full range of shoes, the types of shoes they offer, and they also do well in terms of brand value,” says Robert Passikoff, president and founder of the New York-based research consultancy.

But it’s hardly the only company having a good run: Both Nike and Under Armour are also gaining ground. In a recent comment on the athletic brands, NPD Group’s Matt Powell described the overall health of athletic apparel business as “outstanding,” up 15% in the most recent 12-month period. He chalks it up to the athleisure trend, which has intensified over the last 18 months. 

“This whole concept of ‘wear to work/wear to work out’ has allowed us to become even more causal,” he says. “And Millennials, who are especially concerned about health and fitness, want to dress that way whether they are working out or not.” He adds that sales of athletic shoes are likely to have their best year in more than a decade.

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